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Let’s face it, the least fun bit of holidays is coming home to the bank statements and credit card bills afterwards. But just a little bit of thought and preparation before you go can save you pounds as well as grey hairs!

Here are our top tips for avoiding common foreign money traps and budgeting wisely.




Tip 1:  Don’t exchange currency at an airport or a train station

If you leave buying your euros to the last-minute at the airport exchange desks, you could end up paying up to 15% more* – giving you the worst deal possible. Rather than throwing money away with poor airport rates, wait till you reach your holiday destination.


Tip 2: You can always negotiate

If you’re travelling to Paris for instance, look for an independent Bureau de Change on the high street. Don’t be afraid to haggle, the person behind the till has discretion on how much they can charge you, so you can negotiate.


Tip 3: Always pick local currency

You’ve probably found yourself panicking in a restaurant or shop abroad when the card reader has asked you “Do you want to pay in sterling or euros?” Instinctively, it might feel more natural to pay in sterling, but you may end up paying 8 percent more.* This is because by opting for sterling, you get locked into a process called ‘dynamic currency conversion’ where the merchant uses its own exchange rate to convert the local currency amount into sterling.

The opaque nature of conversion rates makes it challenging for most travellers to understand exactly how much they are being charged, so if you’re in doubt – always choose the local currency option.  


Tip 4: Use local taxi apps to resolve language barriers

Using Uber or the local taxi equivalent app of the country you are in can be really useful for budgeting your travel expenses. It is great for two reasons; it prevents you having to take out extra cash (and paying a premium for it) and the driver can use the app rather than relying on you to describe the address you are travelling to, resolving language issues.


Tip 5: Use a prepaid card for budgeting family expenses

Prepaid currency cards are used the same way as credit or debit cards, except that you load the card with cash in advance. For families (or retail therapy addicts) that want tighter control over their holiday spending, the prepaid card might be the way forward.

Do keep an eye on provider exchange rates though and whether you want to lock in a rate. You might also want to think carefully about how much cash you load onto the card, so you don’t find yourself with leftover currency once you return from your holiday. 

If you’re a parent, a prepaid card is useful for setting spending limits on your child’s holiday and you have the flexibility of topping it up from the UK if your child ever needs extra funds.


Tip 6: Keep an eye on the rate of exchange

While planning is crucial, you should always keep an eye on the market and build up your currency amount on the prepaid card accordingly. Rather than topping up your prepaid card once and leaving it, keep exchanging as you see the rate get better. A common mistake is not realising how quickly the rates of exchange change.


Tip 7: Consider fee-free debit or credit cards

If you are not fussed about setting yourself strict budgeting limits, fee-free debit cards from challenger digital banks like Starling, or your simple every-day credit card are still great options to use abroad.

They give you great protection and flexibility and you don’t waste money by exchanging currency that you may not spend. You can cancel it anytime and you also get an exchange rate that moves with the market.




*With special thanks to foreign exchange expert Jamie Lesinski, from currency brokerage service Prime Cap Payments for his help in compiling these tips.

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